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TMI Blog2019 (12) TMI 9X X X X Extracts X X X X X X X X Extracts X X X X ..... Ashok Jindal, Member (Judicial) Present for the Appellant: Shri Poojan Malhotra, Advocate Present for the Respondent: Shri H.S.Brar, AR ORDER The appellant is in appeal against the impugned order wherein the interest has not been granted for the intervening period. 2. The facts of the case are that the appellant filed refund claim application dt.3.1.2018 on 8.1.2018 for ₹ 40 lakhs alongwith interest in pursuance of the order of this Tribunal dt.30.11.2017. The Commissioner vide order dt.27.3.2009 disallowed the Cenvat credit of ₹ 64,73,939/- and order its recovery along with interest. Rebate of duty on the goods exported amounting to ₹ 40,15,112/- was also disallowed and its recovery was ordered along with interest. A penalty of ₹ 64,73,939 was imposed on the appellant. Further, penalty of ₹ 50 lakh was also imposed on Shri Arvind Gupta, Managing Director. The said order was challenged before this Tribunal and this Tribunal vide Stay Order dt.7.8.2009 directed the appellant to deposit a sum of ₹ 25 lakhs towards demand of ₹ 64,73,939/- and ₹ 40 lakhs towards rebat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of deposit till its realization of the amount. 9. The said issue has been dealt by this Tribunal in the case M/s. Fujikawa Power and other vs. CCE, Chandigarh-I vide Final Order No.61041-61042/2019 dt.26.11.2019 wherein this Tribunal has observed as under:- 11. The contention of the Ld.AR is that in terms of Section 35FF of the Central Excise Act, 1944, the interest on delayed refund is to be paid after 3 months from the date of communication of the order. When specific statute has been made, therefore, the decision in the case of Sandvik Asia Limited (supra) is not applicable to the facts of this case on the ground that the said decision has been delivered by the Hon ble Apex Court in the context of Income Tax Act whereas we are dealing with Central Excise Act provisions. I find that whether the provisions of Income Tax Act and the provisions of Central Excise Act are pari material or not. The same has been examined by this Tribunal in the case of Donar Foods reported in 2017 (346) ELT 612(Tri.-Chan.) wherein this Tribunal observed as under:- 27 . We have seen both decisions referred before us. The decision in the case of M/s. Cy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hough separated remain as they were produced and hence continued to be agricultural product or product of agriculture . 30 . As the Hon ble Apex Court has held that conversion of paddy into rice is not a distinct operation and the rice and husk remain in their natural form as a result of dehusking and are covered by the term 'agricultural product . 31 . Therefore, we hold that the test of manufacture has been failed as the goods are not manufactured goods as per Section 2(f) of Central Excise Act, accordingly, the question of excisability does not arise. Therefore, the Issue No. 1 is answered in favour of the appellants. The said decision of this Tribunal has been affirmed by the Hon ble Apex reported 2017 (354) ELT A-57(SC) wherein It was also held that the definition of manufacture under Section 2(f) of the Central Excise Act, 1944 is pari materia to the definition provided under Section 2(29BA) of the Income-tax Act, 1961. Therefore, I find no force in the arguments advanced by the Ld.AR that the decision of Income Tax Act is not applicable to the Central Excise Act whereas the provisions of both Acts are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to as the appellate authority) under the first proviso to section 35F, is required to be refunded consequent upon the order of the appellate authority and such amount is not refunded within three months from the date of communication of such order to the adjudicating authority, unless the operation of the order of the appellate authority is stayed by a superior court or tribunal, there shall be paid to the appellant interest at the rate specified in section 11BB after the expiry of three months from the date of communication of the order of the appellate authority, till the date of refund of such amount. 17. On-going through the provisions of both Income Tax Act, 1961 and Central Excise Act, 1944, the interest on delayed refund is payable after expiry of 3 months from the date of granting refund or from the date of communication of order of the appellate authority, which are parimateria. Therefore, the decision of Hon ble Apex Court in the case of Sandvik Asia Ltd. (supra) is law of land, in terms of Article 14 of the Constitution of India which is to be followed by me, wherein the Hon ble Apex has observed as under:- 45. The facts and the law referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The word Compensation has been defined in P. RamanathaAiyar s Advanced Law Lexicon 3rd Edition 2005 page 918 as follows: An act which a Court orders to be done, or money which a Court orders to be paid, by a person whose acts or omissions have caused loss or injury to another in order that thereby the person damnified may receive equal value for his loss, or be made whole in respect of his injury; the consideration or price of a privilege purchased; some thing given or obtained as an equivalent; the rendering of an equivalent in value or amount; an equivalent given for property taken or for an injury done to another; the giving back an equivalent in either money which is but the measure of value, or in actual value otherwise conferred; a recompense in value; a recompense given for a thing received recompense for the whole injury suffered; remuneration or satisfaction for injury or damage of every description; remuneration for loss of time, necessary expenditures, and for permanent disability if such be the result; remuneration for the injury directly and proximately caused by a breach of contract or duty; remuneration or wages given to an employee or officer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of payment of initial amount till the date its refund. Therefore, I hold that the appellants are entitled to claim the interest on delayed refund from the date of deposit till its realization. 19. Further, the interest on the refund shall be payable @ 12% per annum as held by Hon ble Kerala High Court in the case of Sony Pictures Networks India Pvt.Ltd.-2017 (353) ELT 179 (Ker.) wherein it has held as under:- 14 . Now, the sole question remains to be considered is what is the nature of interest that the petitioner is entitled to get. As discussed above in the judgment Commissioner of Central Excise v. ITC (supra), the Apex Court confined the interest to 12% and further held that any judgment/decision of any High Court taking contrary view, will be no longer good law. The said judgment is rendered, in my considered opinion under similar circumstances. So also in Kuil Fire Works Industries v. Collector of Central of Excise [1997 (95) E.L.T. 3 (S.C.), the pre-deposit made by the assessee was directed to be returned to him with 12% interest. I have also come across the judgment of the Calcutta High Court in Madura Coats Pvt. Ltd. v. Commissioner of C. Ex., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, the amount deposited by the appellant is to be treated as pre-deposit since the matter had not attained finality during the relevant period. Therefore, refund is to be treated as refund of pre-deposit made when the appeal was pending. There is no dispute that the amounts deposited is duty but this is not the issue which has been taken into account while precedent decisions have allowed the interest at 12% on the refunds claimed in respect of pre deposit. I find that in the decisions cited by the learned advocate, interest at 12% has been allowed. Therefore, following the judicial discipline, I consider it appropriate that interest in this case also is to be allowed @ 12%. Accordingly, original adjudicating authority is directed to workout the differential interest amount and make the payment to the appellants. 21. As the provisions of section 243 Income Tax Act, 1961 and section 35FF of Central Excise Act, 1944, are pari-materia. Therefore, following the decision of Hon ble Apex Court in the case of Sandvik Asia Ltd. (supra) and Sony Pictures Networks India Pvt.Ltd. (supra) I hold that the appellants are entitled to claim interest from the date of payment of initi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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